Policy Bias in China: Fighting with Credit Leverage or Adding more Stimulus?

A key gauge of the debt burden in Chinese economy exceeded 300% of GDP, the Institute of International Finance reported. Beijing was forced to maintain the trajectory of undesirable debt growth, increasing monetary and fiscal support in response to shocks in foreign trade, weakening foreign demand and activity in production and services sectors. Big tax cuts and following decline in...

Carry Trade Flows May Gain Momentum as China Finds Path to Recovery

An upbeat surprise in Chinese economic data for June provided a very limited “quota” for the growing market concerns this week. A pickup in macroindicators across the board, such as industrial production output, consumer spending and investment in fixed assets, should reduce the overall degree of nervousness regarding trade headlines. With negative economic consequences arising from tariffs, China’s ability to...